Open source CRM: a complete buyers’ guide
If you're looking for a new CRM and want to save on software costs, open source software could be a great option for you.
This does not mean, necessarily, that it is an easy option. Sure - the source code is free to access - but you'll need a fair amount of customization to make it work for you, and as anyone can access the code, you will also need to spend a fair amount of time developing your security protocols.
This guide is designed to help you plan your switch over to open source CRM thoroughly and effectively. The costs of getting it wrong are significant - you want your sales team selling, rather than grappling with a poorly-conceived software replacement project.
- What open source software is
- The pros and cons of open source software vs proprietary software
- How much to budget for an open source CRM implementation
- Some open source CRM systems to kickstart your selection shortlist
An open source CRM makes its source code freely available so users can make modifications for no additional cost, allowing a greater degree of customization for users. This type of CRM can be useful for many different types of business.
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Covering the key issues faced by businesses selecting and implementing CRM.
Businesses who have the need for customization and the technical competence to implement customization in the open source CRM are the ideal candidates for an open source CRM. Also, companies operating on a tight budget and are happy to use a basic open source CRM are possible users. Either way, to get an open source CRM operating effectively is likely to take a degree of time and effort so businesses should expect this time cost.
We’ve broken down some of the advantages and disadvantages of open source and proprietary CRMs in the following table:
Free (or very low cost)
No contracts or long-term commitment needed
Free to download
Limited support (often limited to online developer communities)
Time and expertise required for customization
Basic versions can have fewer features than proprietary software
Typically wider feature set
Full support packages offered by vendors
Customization possible with limited coding knowledge
More expensive than open source
May end up paying for features which are unnecessary.
Commitment to contracts for certain periods of time
May not be able to fully customize for the precise feature-set you need.
Which type of CRM to choose will largely depend on the circumstances of the business in question. While open source CRM is typically seen as a way for small businesses to save on license fee costs, larger companies which need a very specific CRM setup and have the team to develop the source code can also benefit.
The cost of open source software will largely depend on the level of customization required. While the source code itself is free, unless you have the development talent in-house it's likely you'll need some help customizing the software to your precise needs.
The below case study for a medium sized travel agent will give an idea of what costs should be expected.
- CRM selection. As the plan is to customize the CRM there needs to be a review of the source code to evaluate whether it can support the required changes – you may need one or two people for this: a technical person who can evaluate the source code and a consultant who can help with the tendering process and should have a good understanding of the marketplace. To get one day of consultancy on each of these issues should be budgeted at $1000 per day, so $2000 in total.
- The travel agency needs some modules built which allow them to build bespoke packages through the CRM; even for basic bespoke work in the CRM this will take a developer fifteen days and then UX and design will take a further five days, meaning the initial module build will cost between $10,000 and $15,000. A contingency should be put in place for ongoing development improvements and patches even if there are no new modules on the product road map.
- Someone will need to project manage the implementation of the CRM. This has additional complexity due to the CRM being open source. All of the standard issues about data uploading, protocol development and specification management are needed; the added complexity of a development project alongside this will take more time. Most companies use an external project manager so the cost quoted will be for an internal employee (you can at least double this for an external consultant). The estimated cost is $5000.
- Training staff is often delivered better by internal management as they have a real incentive for the staff to understand the CRM and will be there on an ongoing basis to supplement the training with ongoing support. For up-front training with an internal staff member you can budget around $1500.
- Ongoing management of the open source CRM requires technical expertise because this person will be testing the CRM and fixing any bugs or issues. Let’s call this one-fifth of the salary of a technical team member, over one year budget for $17,500.
So for a low to moderately complex open source CRM implementation project with a mix of consultants and internal staff the cost for the first year is $41,000.
Many of these costs would still be relevant for a proprietary system – though customization costs would be lower and the ongoing management would be cheaper. Once the licence fee is factored in open source CRM is unlikely to be a lot cheaper.
Instead of fixating on prices businesses should focus on their needs and resources and then make a decision from there. When budgeting focus on the actual cost of consultants but also include a cost for internal staff; it is common for that cost not to be budgeted in, but staff who are focused on a CRM project are taken away from other activities.
There are a large number of open source CRM providers, below are a couple to get your search started.
- SugarCRM is one of the most popular open source solutions, they have a community edition which is free and there is a community of developers who can work on customization. This is important if you need to get solutions as you’ll be in a position to negotiate on price. The core feature set includes sales automation and forecasting, customer service, lead management, bespoke permissions, advanced workflow and product level quotes and forecasting.
- Vtiger carries a small cost of $12 per month per user; there is direct support and developer forums and it’s been downloaded three million times. There is a rich feature-set which includes lead management, customer service and support, campaign management, mailing, inventory management, integrated calendars and email integrations and extensions.
- SuiteCRM is free and deigned to as an enterprise-grade open source solution. It aims to compete with software like Salesforce and Microsoft Dynamics. The feature set which enables it to compete with top industry players include actionable insights to boost conversions, sales and customer care, significant resources to empower developers to build best-in-class customizations. SuiteASSURED supports compliance driven organisations with the benefits of open source freedom and the rigour of proprietary software.
- Zurmo offers free and paid versions. Their USP is that they use gamification to make using a CRM more fun. For paying customers more features and support await. You’ll find contact management, activity management, score and badges which have been proven to improve user adoptions, reporting, marketing automation, product management and a wide range of integrations (including Google and Gecode).
Good luck with your search, and remember to first define your needs and only then look for a CRM that meets them. For the right business - and with the right amount of research and planning - open source CRM can be a great choice.
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